I think if the investment was a very small one as a % of the fund, an acqui-hire is a minor gift re: your dogs.
If you put in $500k out of a $200m fund into something that didn’t work out, there are a lot of issues in shutting down a company, it’s a time sink with a lot of drama, and you don’t many any money, that way either.
Much better for the team to find a good home even if the return is essentially 0x.
Maybe you can invest in the team again on the next one, and it’s much better for them. And you don’t have to go through the headaches of a shut-down, at least not as many of them, usually.
But if it’s a large investment as a % of the fund, it’s really kind of sad.